Living a More Purposeful Life One Cent at a Time

“Kids Don’t Have to Be Expensive”: A Savings Update

Since I announced Half Penny’s impending arrival, I’ve heard two questions asked with equal gusto: “What do you mean your maternity leave isn’t paid?” and “You know kids don’t have to be expensive, right?”. And the best part is that sometimes the same person will ask both of those questions.

Let me break this down for everyone for once and for all. The sheer fact that I am not earning my regular income for an entire year means this kid will be expensive.

Why We Save

I am taking twelve weeks off without pay–unless I am forced to use a week or two of sick time–and then when I return to work, I’ll collect approximately 70% of my normal paycheck for the remainder of the school year. Tell me again kids aren’t expensive.

While I’m on my FMLA-granted leave, I’ll be sending the district money every other week to cover my portion of our insurance to the tune of a few hundred dollars. I also won’t be paying into my pension, which means I will have to work longer or buy back days if and when I ever get to retire. Now it’s not just a financial expense; time is added to the mix.

And that’s to say nothing of medical expenses. I already know the exact amount of money that my insurance company forecasts this birth costing us. Because if anyone is willing to sit on hold and be connected to three different people with her spreadsheet at the ready, it’s this girl. But there are a lot of assumptions wrapped up in that dollar amount: no c-section, no complications, no nothing. That’s a two to three day, incident-free hospital stay. Quite frankly, I’ve had to leave mycar in the shop for longer stretches of time.

All of that is to say nothing of the much-discussed expenses like diapers, formula, and preschool. Never mind cars and college. (I wonder how Half Penny feels about a bicycle and MOOCs?) So while not all kids have to expensive, many of them are. And even if Half Penny comes into this world kicking and screaming at a comparative bargain, I’m not willing to let the adage that “kids don’t have to be expensive” cause financial hangups for us. Because, like all moms-to-be, in addition to the occasional karate chop in my rib cage and the never-ending nausea, I am overwhelmed with the feeling that there is nothing I won’t do or spend to keep this baby healthy and happy. Nothing.

What We Save

Earlier this year, I alluded to the fact that we were already trying to get crafty with our finances to prepare, so I thought I’d share a bit more of our strategy:

Side Hustles – For the past three months, I’ve banked all of my side hustle income in our savings account. Normally, it goes towards the mortgage or our taxable investment account. Not so now. This money is especially important because we can’t actually cover all of our expenses on Mr P’s salary when I’m on leave. But we’re close enough that this side hustle money will actually float the difference.

Year-End Stipends – I earn two really piddly stipends for extra activities that I do during the school year. Mr. P earns a more substantial one for coaching. While most years we spend half on a vacation and save the other, all of these funds are going straight to savings this year.

(No) Extra Mortgage Payments – I can’t even tell you how painful this is for me. February was the last month that we paid extra on our mortgage. Where’s the money going? You guessed it. Savings.

Roth IRAs – This is the only area of our budget that we haven’t dialed back on. We’re still on track to fully fund our Roths by next April. Since this goal will have to be put on hold while I’m on leave, we didn’t feel comfortable scaling back on it now.

The Possible Results

While I won’t know the actual results of any of this money maneuvering until after Half Penny is here, I do know that finding out we were wrong to assume the absolute worst case scenario that kids are, in fact, expensive will leave us with a larger lump sum of savings than we’ve had in a long time. We can use it to start a 529, get a leg up on preschool plans, make a monster mortgage payment, or lots of other things. And out of all the times I’ve been wrong in my life, that sounds like a pretty great outcome.

So if you’re someone who has told me that kids don’t have to be expensive, I hope you’re right. But in the event that this one is, at least we can rest a bit easier. And with the three AM bongo playing on my insides and perpetual heartburn, I’ll do just about anything to sleep better at night.

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30 Comments

Kids are indeed expensive if you take into account all the opportunity costs (i.e.time, sleep). But sometimes something in life is just worth investing in without questions. The best we can do is to minimize any costs we can incur through our frugal habits. Good luck on the journey!

Between our 6 kids, I’ve lost 7 years of full time employment. So yeah, a little pricey. But as far as kid stuff, not so much. Even with 5 at home, we spend maybe $100- $300 a month on stuff. Bigger car, for sure. Bigger house…yup. Just not so much on the clothes/toys/gear.

I think that’s the secret, Ms. Montana. Dialing back on all the “stuff”. I’m hoping we set a good pace for ourselves with our registry. People are already telling us we didn’t ask for enough things. But really, I don’t want to be all about the toys all over the place.

Kids are expensive, I can’t even entertain they aren’t. Daycare and insurance alone are enough to push me into that assessment.

There are ways to soften the blow obviously, but unless you have free childcare I don’t think it would be inexpensive.

Great work on the prep, it’s painful to stop the progress but you will figure it out eventually and get back on track (this is not from experience yet, but as a hopeful new parent that will need to figure out how to get back on track soon)

Congrats on all that savings. It’s not an easy thing to bulk it up as much as you are doing, even though you have a definite need on the horizon and an approaching deadline.

I was freaking out a little at a kid’s birthday party this weekend when all the other parents started talking about sending their kids to private schools (and the associated costs.) Not only does it pull heavy-hitter advocates for public schools out of the mix, but what a dent it would put in our ability to save for other things if we had to pay $10K annually for private school.

Oh, Emily. I can’t even with the private school bit. I’m really fortunate to live (and work!) in an amazing public school district. And I can’t tell you how many students that I teach who have transferred out of private schools because their families finally realize they get better services for learning disabilities in public school. Sigh.

Aw, I’m sorry that the money plans have changed. It hurts not to be able to pay extra on things (I’m switching jobs right now and won’t have a paycheck for a month, so I can sympathize on some levels). I don’t qualify for paid maternity leave, either, so yeah, taking time off to recover from the birth and to get to know the new kiddo means less money.

I think when people say kids aren’t expensive they mean you don’t need to buy the $400 rocker that new moms are tempted to buy. But you already know that. 😉

Congrats again on Half-Penny and I hope he/she lets you get some rest sans karate chops.:)

Don’t even get me started on those rockers! They are more expensive than leather La-Z-Boy recliners! We didn’t put one on our registry because I feel like I will have much better luck at a regular furniture store.

I’m with you, Penny. Kids are expensive. Opportunity costs and college make them so. Nothing you can do about the opportunity costs. You can’t work and care for a newborn at the same time. College, however, might prove to be a less daunting cost. I can’t see how technology doesn’t totally disrupt college by the time Half Penny is 18. The current business model is too inefficient and costly to survive. Best of luck, Penny. Hopefully, Half Penny will go lightly on your ribs during this last phase of the pregnancy.

I am hoping that Half Penny will never have to learn how to drive (how cool does that sound?!) and that this whole higher education mix is sorted by then. I am, however, terrified that that means the college/school loan bubble will burst sometime in the next two decades. The fallout won’t be pretty. Thanks for your kind words, too, Mr. G!

I can’t believe how expensive kids are! Especially in countries like the U.S. where you have to pay for medical bills AND get almost no parental leave time. At least it seems like you are preparing the best you possibly can. Best of luck with everything!

I love this philosophy—plan for the worst, hope for the best! Seriously hoping college is free by the time our kids get there, because even with planning we’re going to come up way short if tuition inflation continues. I plan on teaching them the importance of scholarships, too.

“Because if anyone is willing to sit on hold and be connected to three different people with her spreadsheet at the ready, it’s this girl.”

I’m cracking up! This was pregnant me, too. I was going to get all the discounts and every last penny out of my insurance! Keep at it!!!

Our insurance customer service people should be sainted for the level of patience they have shown so far. Truly. But I want to go into the financial part of this with my eyes as wide open as possible. It makes me happy to hear I’m not the only person like this! Maybe that’s where they learned the patience from 😉

I’m definitely going to tutor. I don’t know that I’ll actively seek out new clients, but I’ll try to keep going with my current ones. The tricky part with that is I don’t want to make too many after-school-hours commitments. Because when I do go back to work, I know I’ll want to have as much time in the late afternoon/early evening as I can with HP. I might even look at freelance job boards this summer!

“Because if anyone is willing to sit on hold and be connected to three different people with her spreadsheet at the ready, it’s this girl.” I applaud your diligence and patience and I believe that none of us should have to go through these shenanigans to find out what our health care will cost. That being said, kids were expensive back when I had mine, and I’m willing to bet that they’re still expensive. It’s unbelievable that your maternity leave isn’t paid, so I completely understand why you’d be socking away every spare cent, just in case. Here’s wishing you and your family the best–financially, healthwise, and 3 AM bongo playing-wise.

Haha. Thanks so much, Gary! Better safe than sorry, right? Honestly, when I think about all the money mistakes I’ve made, I’ve never come up with “too much” as a consequence. So this could be a really fun thing to be wrong about!

Yes, kids are soooooooo expensive. This was a relief for me read, Penny! I get really annoyed when I read personal finance blogs that try to tell me they aren’t. I pay an extra $450/month for her health insurance. Her preschool – part time – is over $900/month. And she’s not at the fanciest preschool! Buying used clothes/toys and getting hand-me-downs from friends doesn’t help to offset those costs very much. Even carseats… Ugh! Hundreds of dollars if you don’t have a friend looking to unload one that you are certain has never been damaged. We were looking forward to kindergarten in the fall because we thought we would finally lose that daycare/preschool cost. But because full-day kindergarten is not mandated in our state, we will have to pay almost $300/month for that (yes, public school!), plus $250/month in after-school daycare. So I guess we are looking forward to first grade?

Kids are expensive, period. I’ve tried to persuade my four-year-old to get a job, but for some reason she has been dragging her feet on that. Hahaha! 🙂

My district also has a terrible maternity leave policy. I had a similar situation to yours when I had my kid. So frustrating.

I really appreciate this post! Reading over and over that kids aren’t expensive makes me feel like my super-frugal husband and I are doing something wrong, or we are missing some key information that everyone else has. Thank you!

Well, if that’s the case, Christie, then we can do something wrong together! I am all about saving money and being creative whenever possible. I have no qualms about hand-me-downs or Target. But like you said, there are certain expenses and certain circumstances where you just have to pony up. Not that Half Penny won’t be worth every cent. 🙂

And maybe 5 is the golden age for kids to listen to their parents and get jobs?! Keep me posted on that one!

My maternity leave wasn’t paid either. Not one dime. I wanted to take 10 weeks off so we just saved as much as we could to try to cover my lost income. Then we qualified for WIC! That helped tremendously but obviously didn’t make up for a full time job. My husband made below the poverty level at the time. And our insurance was terrible and paid almost nothing. I’m telling you this just to make the point that things work out. We didn’t end up in the poor house and you just find places to cut back (even if you are already living on a shoestring like we were). I know it probably doesn’t lower your stress but I am living proof that you’ll survive! Hang in there. It seriously will all work out. (And they will continue to be expensive even 20 years later but totally worth it!)

Oh, it absolutely lowers my stress, Dana. Thank you for sharing! As much as I’m annoyed about my work’s maternity leave (disability leave) policy, I couldn’t ask for better health insurance. Once we get all the bills, I plan to share all of the expenses, but so far, I haven’t paid a dime for anything except our Level 2 ultrasounds and to meet with a specialist. And even that was $300 that counts towards the deductible of having Half Penny.

They really make it unreasonably difficult to figure out just how much it will cost to give birth, don’t they?

I think a lot of the “kids don’t have to be expensive” mantra is in response to those articles about how much a child costs from birth until 18. Those calculations look at the wrong numbers – they include many discretionary expenses like new clothing, sports activities, having to buy a new car, etc.

Kids definitely come with a lot of costs, but it’s not so easily quantifiable as just looking at the stuff you have to buy for them.

I’m really sorry that you don’t have any paid maternity leave – totally unfair and just wrong. At least you’re doing so much planning ahead. I know others who have suffered pretty bad financial consequences just because they made the audacious choice to have a child, without making all of the necessary preparations.

Wishing you a smooth delivery and a happy and healthy growing family. Have you heard of the Dave Ramsey teacher appreciation giveaways this month? Scroll to the bottom of the site and enter, and maybe you’ll get a little baby bonus!

Congratulations on the baby! I agree that kids are expensive, no doubt. I think what others say is that it can be less expensive. I’m 22 weeks in, haven’t bought a single piece for the baby but already paid quite a bit for medical expenses. We’re lucky to have a generous leave and medical expense is capped once I hit my deductible, but I’m sure that this is just the start. Childcare just keeps on increasing too. You even have to pay to be on the waitlist for day care in our area. But it’s definitely worth it (in my opinion).

I can’t remember if I ever said that but I kinda doubt it. If I did, I was having a delusional day. Childcare alone blows us out of the water.

Other than that I think it’s more opportunity cost for us. There are so many more uses for that $25K per year we spend on childcare and food for zir 😉

A suggestion if you might find it useful: you could (if you wanted to take the chance) register for larger sized diapers like sizes 3, 4 and maybe even 5. We were ALWAYS taken by surprise by JuggerBaby’s growth spurts and a box in the next size up was handy when we couldn’t cram that chubby butt into the smaller sizes any longer.

Of course growth rates will differ so much between kids. I look at nieces and nephews who are little wee things and compare them to JuggerBaby who seems like a legit Buddha-bellied monster next to them and it’s like ohhh ok. You won’t be in the next size up for … another year? Kids!